Most of us do not understand that there is a big difference between CTC, gross salary and net salary in-hand.Basic Salary: Basic salary is a fixed part of your compensation structure and the complete amount becomes a part of your in-hand salary. Allowances: Apart from basic salary, there are some allowances your CTC will contain. Examples include HRA, conveyance allowance, leave travel allowance. Some of these allowances are tax free up to a certain limit and some of them are dependant on your actual spending. Deductions: A major part of your CTC comprises compulsory deductibles. These include deductions for provident fund, medical insurance etc.Allowance : HRA Taxability :
40-50% of basic
Rent paid less 10% of basic salary Allowance : Medical (allowance) reimbursement Taxability : Exempt up to Rs 15,000 per annum